President Obama signed a recovery package into law this week, but is it going to be enough to pick up the slumping economy? The number of Americans continuing to receive unemployment checks rose to a record last week -- nearly 5 million people.

And last week President Obama announced help is on the way for up to 9 million troubled homeowners. He unveiled a $75 billion plan to aid borrowers who are suffering from falling home prices and unaffordable monthly payments.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE U.S: In the end, all of us are paying a price for this home mortgage crisis, and all of us will pay an even steeper price if we allow this crisis to continue to deepen. The crisis which is unraveling homeownership, the middle class and the American dream itself.

(END VIDEO CLIP)

VELSHI: That plan is now the source of quite a debate. First, will it turn the housing market around? Second, does it go far enough or too far? Does it bail out homeowners who shouldn't be bailed out in the first place? Joining me now Susan Wachter from the Horton School at the University of Pennsylvania and Laksman Achuthan, managing director of the Economic Cycle Research Institute and CNN special correspondent Frank Sesno. Welcome to all of you.

Susan, let's start with you. Quite a surprising and hostile reaction from some quarters to this housing plan. We've been inundated with e- mails and calls from people who say why are we bailing out people who made bad decisions, who took undue risk and why is there nothing for people who didn't take those sorts of risks and bought homes they could afford and got into mortgages that made sense? What's our response to that, Susan?

PROF. SUSAN WACHTER, THE WHARTON SCHOOL UNIV. OF PENNSYLVANIA: The response is they're right. There is no bailout for those who didn't make that decision except for the fact that we are bailing out the economy. If we don't do that, we are all in very big trouble.

VELSHI: In this plan and we're going to talk about this in some detail. There will be the ability for some people who have not been able to refinance to do that. There is the ability for those who are really in trouble in some cases at least to modify their loans so they'll pay lower interest for the next five years and then work up to the interest rates that we have now in today's market.

Frank Sesno, President Obama said a few things in announcing this plan. First of all, he said we're getting back to the American dream and second, he said it does not reward speculators and those who are irresponsible. The fact of the matter, Frank is it has to, because we don't have a way of separating those who are in trouble because they were irresponsible and exercised bad judgment from those who are in trouble because circumstances got them in trouble.

FRANK SESNO, CNN SPECIAL CORRESPONDENT: That's exactly right Ali. We are getting back to the American dream and before we get back to the American dream we're going to have to live our way through the rest of the American nightmare here. Because the problem, as you know and the details of the plan bear out, it will help people up to a certain point, up to a certain amount of depreciation that they've had on their house. If their loan exceeds the value of their house, it's 105 percent, but there are a lot of people who bought at the peak and they've seen their property values drop 20, 30, 40 percent in neighborhoods across the country and in very volatile areas such as Arizona and Nevada and Florida where the bottom's fallen out and they may not get any help at all.

Beyond that, it's not just what the government is doing and what the banks say they are doing but this whole securitization business behind the mortgage mess and that may not move that off the dime if banks can't be selling and reselling their mortgage bundles.

So it is going to take us a very long time even in the best of circumstances for Obama's we're getting back to the American dream to unfold here.

VELSHI: And Frank for those who are worried about why the market is doing what it's doing. Part of that is that we're waiting for that third leg of the stool and that is how the treasury secretary is going to deal with the second half of TARP and how that will unfreeze credit markets which are slowly coming unfrozen.

I want to ask you, Lakshman. We have the housing market which is a major issue and we have the jobs market which is a major issue. The nonpartisan Congressional Budget Office has released some numbers that they say reflect where unemployment in this country is going because of the stimulus bill and right now we're at 7.6 percent. They say the range for 2009 is from 7.7 to 8.5. So they say it's definitely going up this year and then they start to see it moving back down. Maybe at the end of this year to 2010, you see the range there 6.8 to 8.1 percent and 2011.

I think it's 2014 before we get to where we were before this recession according to the Congressional Budget Office.

LAKSHMAN ACHUTHAN, MANAGING DIR., ECONOMIC CYCLE RESEARCH INSTITUTE: Right. Right. Right. What you're dealing with there are economic models and forecasting and look what that's -- where that's gotten us. I mean, so I wouldn't put a lot of faith in where those numbers are going. Basically the reason those models are saying unemployment is coming back down at some distant horizon is because a huge hunk of money has been dumped into the model and it most forecast some result.

VELSHI: There's some sort of calculation there, if you put this much money in --

ACHUTHAN: A plus b equals something.

The problem is the economy is more complex than that. You mentioned the two key moving targets here. Unemployment going up and home prices going down that are causing the problem. So the stimulus is trying to deal with that to a degree. It is causing all kinds of angst because it goes against our nature. Free markets, if you make a bad decision you're supposed to deal with it. But the point earlier which the participant made which is you have to be careful because if you get so upset about that that you're going to cut off your nose to spite your face your are going to be stuck with a much more severe recession and it's a valid question. How much pain can we take? If you don't do the bailouts the business cycle will eventually turn and recover.

VELSHI: It may take longer?

ACHUTHAN: And it might be multiple times more painful. Instead of talking about 7 and 8 percent unemployment you're talking about double or triple that.

VELSHI: Susan, let's talk about that. You deal with housing prices and models. Housing prices by most people's calculation probably needed to adjust themselves from 2005 and 2006 levels. Should we be getting involved in putting a floor on housing prices or should the free marketers win this one and say let houses be worth what the market dictates they're worth?

WACHTER: The problem is that we don't have a free mark out there. The problem is that we have constraints in some ways on the markets through the securitization process. Good loan modifications are not happening once they're a win-win for investors and borrowers simply because securitizing are keeping hands tied.

VELSHI: I'll interrupt you for a second. Securitizers are keeping servicers hands tied, servicers are the ones that deal with your mortgage, the people you call if you want your loan modified and securitizers are those after that, those to whom the mortgages are sold and resold.

WACHTER: And ultimately the investors. So these are heavily, contractually detailed obligations that are tying the hands of everybody to stop the actual good solution which is loan modification. Too many foreclosures are happening that are not economically sound.

VELSHI: Frank, let's talk about the politics of this for a second.

SESNO: Oh, that.

VELSHI: In some way the Obama administration came in on the idea that they will have a plan. They will fix this. There was a great deal of confidence expressed and ultimately there is no country in the world more dependent upon consumer confidence than the U.S. economy. Our measure of consumer confidence is now the lowest it's been since we started measuring consumer confidence. What does this administration need to do with all of this complexity to send out the message that they're in charge and they are on top of things?

SESNO: It's really, really difficult. If they could have a magic wand maybe that would help, but there is no magic wand and it's been complicated as we have been hearing in this discussion that reaches to the actual lenders themselves and confidence which is psychology, securitization which is very complex and lives behind the scenes and is global. So if the administration from sort of a messaging and confidence conveying point of view wanted to really hit a home run it would be able to say in a simple line or two, here's what we're doing and here's how this gets addressed. But this issue, this crises lives on so many different levels it sort of defies that sort of thing. So President Obama is doing the best he can.

VELSHI: What a great discussion. Thank you to all of you for joining us. Susan Wachter from the University of Pennsylvania the Wharton School, Frank Sesno, CNN special correspondent and Lakshman Achuthan, managing director of Economic Cycle Research Institute. Thank you to all of you.

Hey we're going to see what Suze Orman has to say about all of this housing talk.

And a cry for help. GM and Chrysler are seeking even more bailout money this week. Why you could be affected if a major U.S. automaker actually ends up declaring bankruptcy.

(COMMERCIAL BREAK)

VELSHI: If you had it with everyone getting a bailout, guess what? There's more. CNN's Mary Snow reports.

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MARY SNOW, CNN CORRESPONDENT (voice over): Two auto giants sending out an S.O.S. GM and Chrysler say they need more federal money, perhaps as much as 21.6 million to survive. Five billion for Chrysler and 16.6 billion for GM.

RICK WAGONER, CHAIRMAN & CEO, GM: Based on our analysis we continue to believe that bankruptcy to be a highly risky and very costly process, potentially very time consuming that should only be undertaken as a last resort.

SNOW: Some who track the industry say the turnaround plans laid out by the automakers stop just short of declaring failure.

JEREMY ANWYL, CEO, EDMUNDS.COM: Some would argue that what they are suggesting is in effect a bankruptcy in all, but the legal construct and I think that's probably true.

SNOW: For GM, restructuring plans include cutting 47,000 jobs this year; about 20 percent are in the U.S. It's shutting down five more plants by 2012, it is also eliminating models. Saturn may be fazed out if GM can't find a buyer. It's looking to sell its Hummer and Saab brands and it is scaling back on Pontiac.

Chrysler plans to eliminate 3,000 jobs. Those cuts come on top of billions of bailout money given to automakers back in December. While it wasn't enough to save tens of thousands of jobs, some economists say the consequences of these companies filing for bankruptcy are far worse.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM: If we don't give them money and they don't go into bankruptcy it will cost us all in the form of a much worse economy and fewer jobs and conditions that are just tough for everybody.

SNOW: Economist Mark Zandi says as many as 3 million more jobs could be lost if the automakers declare bankruptcy since they won't be able to get financing and they'll have ripple effects on auto suppliers and the broader economy.

(END VIDEO CLIP)

SNOW: The presidents newly reformed task force on autos will be reviewing the carmaker's plants and must determine by March 31st, whether the companies will be viable in the long run.

Mary Snow, CNN, New York.

VELSHI: Joining me now is William Holstein he is the author of "Why GM Matters," inside the race to transform an American icon and our good friend Peter Valdes-Dapena who covers the auto industry for CNNMoney.com.

Thank you for being here. I have to think most people if they supported the first set of auto bailout which is we ultimately did, probably did so because of the dire warnings of how many people would be laid off. I think we got over the fact that we might loose an automaker. Now we're back into where a lot of people thought we would be in the first place particularly with the stunning numbers that GM is asking for.

Let's just put these up and we can show you. General Motors is asking for another $16.6 billion. Chrysler for another $5 billion and Chrysler wasn't even straightforward about this Peter when they asked for the money. We had to parse the press release to see how much they were actually asking for, but General Motors said they could cut 47,000 more people to stay viable.

Are these businesses worth continuing to invest in?

WILLIAM HOLSTEIN, AUTHOR, "WHY GM MATTERS:" Absolutely General Motors has been making enormous strides and getting their cost structure right and that's what all these cuts are about and getting rid of brands and factors of people are driving down the cost structure to a point where they can make money in every vehicle they sell.

VELSHI: But I think we're talking about General Motors repaying the American taxpayer by something like 2017.

HOLSTEIN: I think it will be faster than that. I mean I think if they can get through the credit crises with the rest of the American economy, they're going to be a very profitable company. They're going to make money in every vehicle they sell because of the givebacks that they've gotten from the UAW. For example, there's a two-tier wage system now and most people don't been that. It made dramatic progress and they had a viable, sustainable business for the long term.

Chrysler is a different case.

VELSHI: At this point, I don't understand why Chrysler, why we think this is going to be a viable company. Peter what do you think about Chrysler?

PETER VALDES-DAPENA, CNNMONEY.COM: I have deep, deep concerns about that company. I think if you look at, for one thing, we're not talking about the numbers business. We're talking about the car business and when you go and you look at the products, you can often tell very clearly why this company is in trouble and the products are not competitive.

Something like a Dodge Ram truck gives me hope that this company does know how to make a competitive product and they can. What worries me is I don't see any new products in the recovery plan until 2010 at the earliest. This isn't a company that can wait. They're in deep trouble now and people are avoiding buying their cars, not because they are competitive because they are worried about the company.

They need new products, they need something in there that will turn this company around faster than anything I can see that they have in their plan. They have an arrangement with Fiat possibly to bring some products in. I don't know if that's going to do it. And --

HOLSTEIN: Fiat is 18 months.

VELSHI: Let me ask you this, William. You know, Chrysler has made the argument that if anybody in this industry fails because of the tie ups that they've got in the parts industry it could send the other into a tailspin. Is that true? Could Chrysler's failure put GM into the grave?

HOLSTEIN: That's true. The supplier networks and there are thousands of suppliers in different tiers, tier 1, tier 2, tier 3. So a significant number of those people go out and many of the suppliers work for GM and Chrysler or Chrysler and Ford or even GM and Toyota. So if you start knocking out these suppliers and they start going bankrupt left and right yeah it's bad for the entire industry.

VELSHI: Peter Ford has stayed above water and this one they have not had to take money from the government. Is Ford able to make it through this thing and if so, why?

VALDES-DAPENA: Well the one thing that worries me again, as you mentioned yourself if Chrysler goes down as Ford has said if there is a stress on the system that would certainly cause stress on the supplier and stress on Ford. They are going very strong ahead with their new product introduction and they seem to be in better financial shape but still not terribly great. I do feel if Ford can stick this out, they actually will be in an excellent position to succeed.

VELSHI: You liked the products at Ford?

VALDES-DAPENA: I like the product quality is very, very good and their reliability and dependable is very, very good. I think if they can succeed in this the new Ford Taurus and they stand to benefit greatly on the upside of this as the economy stands to improve. I think that's what they're looking forward to.

VELSHI: All right. We're out of time but thank you so much. William Holstein is the author of "Why GM Matters, Inside the Race to Transform an American Icon." Peter Valdes-Dapena makes a very good point by the way; he's our auto guy at Money.com. He likes driving those cars. He knows what the cars feel like on the inside and sometimes he takes me along for a ride. Peter good to have you here.

What does President Obama's foreclosure rescue plan means for you or someone you know? Suze Orman is in the house, she is here to help break it down for us.

(COMMERCIAL BREAK)

VELSHI: President Obama announced this week that billions of dollars are on the way to help troubled homeowners. But the fact remains that nine out of ten homeowners are not currently facing foreclosure. I'm sure you'll want to know what the housing bill means to you. Well we turn to Suze Orman, she's the host of "The Suze Orman Show" on CNBC and the author of "Suze Orman's 2009 Action Plan Keeping Your Money Safe and Sound." I've read it cover to cover. It is worth it. You can put it in your pocket and get on a plane or go where ever you're going and read it in a few hours and really worth it, Suze.

Before we get into the details about the housing crises, you must be getting e-mails because we're getting them. For people to say you just told us things were going to be OK, people would feel better about this economy, they would re-engage and they would spend money. You and I have discussed this. I don't know that I would feel responsible cheerleading an economy that is in great danger.

SUZE ORMAN, HOST, "CNBCs SUZE ORMAN SHOW:" I forever have been saying, listen, the back of this economy should not be carried on the consumer where they're already in debt, they're underwater in their home; they're behind on their car payments. They don't have any equity anywhere, are you kidding? Responsibility should be your own personal financial stimulus package which means you need an eight-month emergency fund in case you lose your job.

VELSHI: Which is a real reality for a lot of people, even if you are not there. So many people are losing their jobs that it could happen to you.

ORMAN: It's more of a probability than just a possibility anymore. Look around, everybody. Even if you haven't lost your job, somebody you know has lost their job and what does that mean to you? They'll come to you and ask you for money and if you don't have the money you're going to feel guilty and it's not right either. You have money that you can spend or you don't have money you can spend. How do you know if you don't have money that you can spend to stimulate this economy? Easy.

If you have credit card debt, if you're behind on payments, you don't have an emergency fund; you're not contributing to the max to your retirement account? Oh, give me a break. You don't have money to spend. Don't carry the back of this economy on your shoulders.

VELSHI: Some people are frustrated because they are carrying some of what other people did wrong in terms of these foreclosures, there's been an outcry about that. Let's explain this because we have been talking about it. People have heard it in the news all week, but there's a lot of confusion about this mortgage relief bill. It's really two things that it does. It allows some people to refinance and some people to modify their loans.

ORMAN: I don't think most people got that there are two separate types of help within this package that was released this week. So, number one. For those people who were good people, you know what else aggravates me, Ali is that all these newscasters that are coming on and saying why should we help people? I've been honest and I've been paying for my mortgage, I don't want to help people anymore. Oh, again, give me a break. There are good people. They bought a home that they can afford and now what's happened to them is because of the economy their income has been cut in half. Maybe they don't really have an income anymore and they had to take another job paying them less.

So now they can't afford their current mortgage, but now they can't refinance even though they put 20 or 30 percent down on a home, they can't refinance because their house has gone down in value. What this program will do is very simple. If you are not under water in your home and you need to just refinance and you have no equity, and maybe you're even 5 percent under water in your home, this plan will allow you to refinance at today's current interest rates forever.

It doesn't reset in five years. It is there forever. So you have to be current on your payment. You have to have a good FICO score. You're just refinancing. However, there's a group of people that are under water on their homes and they have a low FICO score, they are behind on their payments. Who is going to help them? The next part of this plan is a remodification where the banks will actually, based on your income, 31 percent of your income, your debt to your income will remodify your loan for five years. They can take your interest rates down as low as 2 percent, after five years it resets gradually, but only up to the point.

VELSHI: To current rates.

ORMAN: To current conforming rate today which would be about 5 that's a deal. I don't care what anybody says. You either go one way or you go the other. VELSHI: Suze, I appreciate that there is such clarity in this because it has been something that we both have been talking through the week about how we've heard other reporting on this. That's very clear. We're going to come back and talk to you about the tax implications with anything that happens with your mortgage or your credit. This is really important.

Because once this chill raises from the air it is going to be tax time and you need to start thinking about that. Suze it is great to have you in house. Stay with us, Suze is coming back for more. Say it ain't so, why some people are blaming the media, yeah, the media for this economic crises.

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VELSHI: The stock market continues its slump reaching lows that haven't been seen for more than six and a half years. Just 15 months ago the Dow was above 14,000, today cut almost in half. This is an economy that is based on people's willingness to spend money and right now people simply aren't willing to spend money. Consumer confidence is lower than it has ever been and that is where legitimate debate about the role of the media comes into play. Some people argue that select media drastically understate the problems facing the economy serving as defective cheerleaders for government and recovery plans.

Others insist some of the media perpetuate the crises while constantly referring to the economy as being in crises. Joining us now our good friend Howard Kurtz, host of CNN's "Reliable Sources" and also the media reporter for the Washington Post as well as Dave Kansas, editor- at-large with "Bylife.com" a personal finance Website and the author of "Wall Street Journal Guide to the End of Wall Street as we know it." Thank you to both of you.

Howard, let's start with you. Suze Orman was just on the show and she was saying that she thinks some of us in the media or people in general have been very hard on people getting bailouts, that we've sort of been singing the tune that people have done the right thing are not getting anything out of this recovery plan and these bailouts and we're blaming the victims. Your thoughts on that.

HOWARD KURTZ, REPORTER, "WASHINGTON POST:" I don't think we've been too hard at all. Any company, for example, that takes federal money has got to change the way it does business and so when we focus on things like huge bonuses for executives and corporate jets and all of that, this is not just because we're trying to take potshots at these mega corporations and it's because they are now taking our money as part of the bailout and it's fair for the media to point out that the rules of the game at this point have to change.

VELSHI: Particularly when people own so much of these company, Dave Kansas, how do you think we've done? What marks do you give the media for the job its done covering the financial crises?

DAVE KANSAS, EDITOR AT LARGE: In terms of covering the crises as it exists and looking back at how it unfolded I think it's done a pretty good job. I think where you can have some criticism is how good a job did it do anticipating how all these complicated real estate-related investments might spin out of control? There wasn't enough written about that and it wasn't well understood enough because it was outside of the standard stock market type of chatter. And how good a job was done in that space I think is a good question.

VELSHI: Howard, you think -- you are one of those people who think at least some of us didn't do a good enough job anticipating what was going on. You -- I know you've done a lot of interviewing on this and a lot of writing on this. Why do you think that is the case? What caused us not to be sharp enough in our forecasts about how this economy would turn out?

KURTZ: I think this was a colossal failure by most major news organizations. For one thing, the Washington Regulatory Agency. It was no secret that, for example, the SEC would allow changes. And, yes, people reported bits and pieces of this, sometimes inside the business pages and sometimes brief items on television and the media did not put the pieces together and tell us about the risks that Fannie and Freddie and others were facing and in particular when it comes to holding the government accountable for loosening the regulatory strings on the recovery.

VELSHI: But you know all of these people. Why? Why is that a failing? What did we do? -- and I say we collectively for the media, what is it that caused us to not report that? Was it willful denial? Was it -- what was it?

KURTZ: I think part of it was a reluctance to be too negative when the party was going on and the Dow was at 14,000. I think part of it was just laziness and not bird dogging some of these agencies that were making these rule changes. Highly technical, tough to explain on television, but very important, we now see, in allowing some of these excesses that caused the bursting of the bubble.

VELSHI: Dave Kansas that's a good point. You're a financial journalist; you don't follow the minute-by-minute stuff. You don't even have a TV at your desk.

KANSAS: That's right. Howard is right that it's complicated and I think the specialized business press did write a lot about CDOs and did write about complicated alphabet soup investments and did write about excesses of Fannie and Freddie. The reduction in standards and mortgage lending, but Howard's one point that I think I do agree with is the connecting of the dots. In defense of journalists it's a thousand-year flood or a hundred year flood. It's pretty hard to forecast a thing that a lot of smart people basically miss, but we did not connect the dots.

VELSHI: Are we right now to negative? Some people tell us if you guys would just say things would be OK people would re-engage in the economy.

KANSAS: I was in the panel with a housing guy in the end of '06 and he said you just write nice stories and more people will buy my homes. I don't think you can put the economy in a position of having that kind of impact on the economy, when people want to go one way and the media can only do so much. People are upbeat about the market; we can write negatively they won't listen.

VELSHI: Howard quick last word for you on this, do you think we're too negative right now or too critical or are we still cheerleaders for the market?

KURTZ: No, I don't think we're cheerleaders for the market right now. The economy is in very bad shape, but I don't think we're getting answers to basic questions such as what happens to the $350 billion that we've given the banks, why hasn't it unlocked the credit market? How can the banks sit on this money when the whole reason that Congress passed this bill was to get lending going again? We've asked those questions and they're hard to answer and I think we need to do a better job there.

VELSHI: All right. Those are tough questions that Howard asks on his show on "Reliable Sources." This weekend when can our viewers see it, Howard?

KURTZ: That is 10 a.m. Eastern every Sunday.

VELSHI: All right very good. Howard Kurtz the media critic for "The Washington Post" and the host of CNN's "Reliable Sources."

Dave Kansas, editor-at-large of Filelife.com and the author of the "Wall Street Journal Guide to the End of Wall Street as We Know It." Thank you to both of you for being with us.

Well it is tough out there, but not only can you survive these economic crises. There are some ways you might be able to thrive.

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VELSHI: These are remarkably tough times for the economy. You know that and each week we want to empower you with real solutions. Many Americans were caught unprepared for the current crises. Our next guest has peered into the future and he says now you have to prepare for soaring inflation before it's too late. Soaring inflation. Prices are going down. He's Stephen Leeb, he is our good friend and he is the author of "Game Over, How you can prosper in a Shattered Economy." I took the book and read it the first day I got it and it is important reading because Stephen, people who see you on our show think you're a very positive guy, a very upbeat person, but there are some dire warnings in your book. Tell us about this.

STEPHEN LEEB, AUTHOR, "GAME OVER:" Yeah. Ali, we're facing a real crisis in America now and it's not going to go. We're past the point where we can solve it without a lot of turbulence, but I am optimistic. Let me just state that at the outset, I think America will do the right thing. It will take a couple of more crises to convince people what the right thing is, but we will get there, we're faced in this world once we get growth going.

Let me put it this way, 2008 is a microcosm of what we're going to see for the foreseeable future. We're going to have bouts of high inflation and we're going to have bouts of recession and depressionary scares like we're in right now. Once we get growth going again and I think we will, although it may take one or two more crises to do it, we will be faced with resource shortages. It's that simple. We'll be back to the summer of 2008.

VELSHI: When corn prices are high, when oil was $147 a barrel.

LEEB: Steel was going through the roof, and these are the very resources we need in order to create alternative energy.

So, I mean, we've got to take advantage of these times when resources are sort of slack to start building out an alternative energy infrastructure that will get us to the next century.

VELSHI: Gold futures just hit a thousand dollars again, we haven't seen those numbers for awhile, you recommend a certain amount of people's portfolio being invested in gold and you recommend GLD which is an exchange traded fund.

LEEB: Yes, exactly, for people that are in the market this is the easiest way to invest in gold, but again, for consumers, for consumers that don't know anything about the market, you can buy either gold coins or silver coins. Just make sure you're dealing with a reputable guy.

VELSHI: It's one of those commodities where the price of a coin is not selling at much of a premium to the price of product and they'll move in the same direction.

LEEB: And GLD, if you're in the market and if you want to get more aggressive you can always buy a gold stock. GLD will work just fine and unfortunately it was the number one recommendation in this book and I say unfortunately because gold is the ultimate shelter in turbulent times.

VELSHI: I think it is worth mentioning you have written many books before, you have forecast this issue so while we're in a recession, people don't think about inflation and don't think about soaring commodity costs and costs of resources, but your book is a very good primer on that. Let's talk about resources and let's talk about how you think people should invest in that. You recommend another exchange traded fund, ticker symbol EWZ.

LEEB: Right. Which represents Brazilian stocks and this is a way of investing in a resource-rich country which has really done a dramatic turnaround. It was yesterday; at least it seems to me where everybody was saying Brazil, 20 percent inflation. No longer, Brazil has strong growth and they're self sufficient. They have the only oil company that has a legitimate chance of increasing reserves significantly and they have tremendous reserves of iron ore and many other minerals and that's what the world's going to need, Ali, it really is.

VELSHI: You actually do have a recommendation of U.S. stocks as well. As an example you pointed out and you would recommend stocks in large companies that have actually seen growth in the last year. There aren't a whole lot of those around.

LEEB: No. Any company that's seen growth in the last year has grown despite accelerating inflation and despite probably the worst quarter we've had since the 30s.

VELSHI: And your example is CVS.

LEEB: CVS is in the health care industry, there are headwinds and their tailwinds. The headwinds are cost control and the tail winds are demographics. CVS is benefiting just from the tailwinds. They're controlling costs, they're right there to help solve this healthcare crises. Resources are not the only problem America's facing, but CVS is a solver of health care problems.

VELSHI: Stephen you have some great advice in the book and I'm a big fan like you are of energy and reading about energy and you deal with solar and wind and everything in the book. It's a great read. Thank you for being with us, thank you for being such a good friend.

LEEB: Thank you so much Ali.

VELSHI: Stephen Leeb is the author of "Game Over."

There are jobs out there. There are dwindling jobs out there, but if you know where to look you might find some even in this uncertain job market. We continued to aggressively seek out sectors where you can find a job now. Thelma Gutierrez has the story of an area where demand is actually growing.

GUTIERREZ: Just as he was about to get kicked out of high school, a counselor brought him to the attention of a recruiter from Los Angeles Valley College. There he took classes in Machining, blueprint reading and computer programming. At the same time he was finishing high school.

LENNIE CIUFO, LOS ANGELES VALLEY COLLEGE: You have to give them a chance to show that to them, and you have to direct that talent in a positive road so they know there's a positive outcome.

GUTIERREZ: By the time Hector graduated high school; he had a job as a machinist and his food in the door to a career in demand.

Lee Cruz from Colbrit Manufacturing is investing in Heckor and training him on the job. He says American companies like his need highly-trained machinists who can run sophisticated equipment.

LEE CRUZ, COLBRIT MANUFACTURING: Our advantage has to be based on being able to compete at the more highly technical end to compensate for the less expensive labor rate in other foreign countries.

(UNIDENTIFIED MALE): Speed rpm.

GUTIERREZ: Despite the economy, there's a skills gap when it comes to machinists. The U.S. Bureau of Labor Statistics says there are no job openings from machinists and the number of workers training to go into the field.

It started six weeks federally-funded academy for displaced workers.

MIKE: My name is Mike, I used to drive a bobtail truck in southern California and when work got slow they let me go.

(UNIDENTIFIED MALE): I used to work as a data analyst at an insurance company. Then I got laid off.

GUTIERREZ: These recently laid off workers say they hope the academy will give them an edge. Like machine degree for Hector. He once was aspired to staff food, now he can work for a six-figure salary if he wants to.

To get to the top of this field, Hector will have to spend another five years on-the-job training and he'll have to take classes at the community college toward a technical degree in manufacturing technology and Hector told us he's going do it.

Thelma Gutierrez, CNN, Los Angeles.

(END VIDEO CLIP)

VELSHI: And stick with YOUR MONEY and CNN, we are going to bring you information about where the jobs are throughout this economic crises. Now you hear the words all of the time, energy independence and climate change, but can the two works together and can they work for you?

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VELSHI: The global economy is on a bumpy course and the fuel that runs that economy, oil, has seen prices plummet as well. When oil and gas prices dip generally so does the will to explore alternative forms of energy. Now this seismic shift in oil prices and the economy have prompted our next guest Daniel Yergin to add a brand new epilog to his Pulitzer Prize winning book "The Prize." He joins us now. Daniel Yergin thank you for being with us. It's an honor to have you here on the show. Tell me the story here. You've written an epilog to a book that you wrote 18 years ago.

DANIEL YERGIN, AUTHOR, "THE PRIZE:" Well, 18 years ago, I did a little bit of updating in the 1990's and then it was so clear as we got into this world of $147 oil and then oil started to plummet that it was time to bring the story together and to say what's changed and what we look for in the future in terms of oil and energy.

VELSHI: Tell me that in a nutshell. What has changed to us?

YERGIN: Well the biggest thing to me is number one is globalization. Americans never would have thought that the price of the pump that they pay would be affected by what happens in the provinces of China and the Hinterland.

The second thing is climate change that was really not part of the debate now it's front and center as we heard through the new Obama administration. The other two things is one is technology, renewables and alternatives that have had this tremendous comeback and finally the balance of power has been shifting and shifting again in the world oil game between the traditional oil companies and the national state- owned oil companies and that's where a lot of the political action is.

VELSHI: All right. We just talked to Stephen Leeb. We talked about last summer when oil was $147. For argument's sake say it's around $40 right now. There are some people who think we have -- we have hit peak oil which means we're not going discover more oil in the future then we have discovered today. We will discover a declining amount in an ongoing basis. Do you share that view?

YERGIN: Yes, it became very prominent as oil prices went up and people said we're running out of oil. By the way, the discussion of peak oil itself I think contributed to the exuberance, national exuberance in the financial committee. But I went back and looked into pride. This is actually the fifth time the world has run out of oil. The first time was 1880s and the last time was the 1970s. And here we are; again, now we are looking at a huge oil surplus.

I think these things shift back and forth. People underestimate technology, new areas. You have talked about Brazil. But I think there is something, which is what happens above ground, what happens in terms of geopolitics and what will happen with investment given the downturn in oil prices.

VELSHI: So do you -- do you think this is all sort of created; we shouldn't be worried about running out of oil? Or should we be?

YERGIN: I think it's a question we have to take the arguments seriously. We have to say, where is the oil, what is the political obstacles? There are a lot of challenges. China will have millions and millions and millions of more cars. So I think they are big challenges but I think the notion that we're going to run out soon underestimates the actual physical resources that are there and what we will see with technology. Doesn't mean it's going to be cheap.

VELSHI: The idea of alternatives and the idea of a cleaner economy drives the sense there might be some money to be made, an investment to be made in the alternative energy infrastructure. There are noises out of this administration that might be the case. For our viewers who have seen the value of their investments plummet so much, is there a future in investing wisely in alternative energy? YERGIN: Well I think there are big noises. Of course, a lot of the alternative energy had been hit just as hard as everything else by the downturn in oil prices. There are a lot of wind projects and others in trouble. One of the things the administration put a lot of money into what they are calling the green stimulus, which is aimed at restoring an economic foundation for renewables because that's where they want to make a very big effort.

So I think renewables are going to become a bigger part of our energy mix in the years ahead. And we're going to see a lot of public policy support for it. I think it's rather difficult in the marketplace right now.

VELSHI: Well, it behooves us all to know more about the energy situation. Daniel Yergin's book is worth the read. Thank you for being with us, Daniel Yergin is the author of "The Prize: The Epic Quest for Oil, Money and Power." A book that has two decades of experience in it but it also has brand new epilogue that makes a lot of sense. Daniel thank you for being with us.

Well Suze Orman is still here, she is in the house. Grab a pen and paper. She has some very important and very specific advice about your taxes that you are not going to want to miss.

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VELSHI: Taxpayers beware. If you have negotiated a credit card debt settlement or a settlement on your house, you may owe the IRS much more money than you think. Get out a pen and paper because chances are you or someone you know is going to benefit from this information. My good friend Suze Orman, host of "The Suze Orman Show" on CNBC and personal finance expert extraordinaire is here to explain this to us.

Suze, a lot of people think the end of the road is near for them. They negotiate some settlement. Let's start with your house. You negotiate a settlement on your house. You will pay less than you owe. You will get some debt forgiven. What are the tax implications of this?

ORMAN: It depends what that house is to you, if it's your primary residency. For instance, you owe $200,000. You do a short sale or foreclosure. They sell it for $100,000. The difference in $100,000 as your primary residency through the year 2012 is forgiven. However, say it's a rental property, you been renting it out. Now it doesn't make sense for you to keep it for whatever reason. Rent doesn't cover the payments. You have to give it up in a short sale. You will owe taxes on that $100,000 difference unless you were insolvent at the time it went into foreclosure or you did a short sale. People do not know for rental properties, you do not get out of it just because you did a short sale or foreclosure. You owe the money to the IRS.

VELSHI: So if you do a short sale, which means you give the house to the bank and you are settled up. You don't owe them anymore money.

ORMAN: That's a foreclosure. That's a deed. Let's say you did that. You go into the bank. They say, OK, you give them the deed in lieu of foreclosure. They turn around and they sell that house for $100,000. But yet you owed $200,000. You will get a 1099 for $100,000, and you will owe taxes on that $100,000 unless you were insolvent, which means you owed more than your network at the time that you went into that short sale.

VELSHI: Does that mean you would have to have filed for bankruptcy protection?

ORMAN: No.

VELSHI: You have to have your assets --

ORMAN: So what it means is at the time you did that all of the debt that you owed on your primary residency and rentals on everything is actually more than the money that you have in your savings account, your 401(k), the equity in your home.

VELSHI: Make sure you look at the accounting before you do anything.

ORMAN: They will come after you people, even if the banks don't issue you a 1099 right now. They are so under water on this paperwork, you technically will owe the money.

VELSHI: Good piece of information. Let's talk about how that works with respect to credit cards or personal debt. A similar situation?

ORMAN: Absolutely. Say you have a credit card and you owe $30,000 on the credit card and you buy either your own willingness or hire a company to do this, you settle for 50 cents on the dollar. You give them $15,000 and all of the credit card companies say, fine, we're even. Guess what? You also will owe income tax on the difference, the $15,000 in this situation and the $30,000 that you owed; you owe income tax on that $15,000, again, unless you were insolvent at the time this happened.

VELSHI: If you were insolvent, if you could do the math right now after listening to you and you find out you're insolvent, what should you do about that generally?

ORMAN: If you're insolvent and you are seriously underwater in a rental property, there are places in Tampa, Florida, Ali that people bought for $700,000 that are now worth $200,000. They were investment properties. They were going to retire there when they were older. If you're that much underwater, you're never going to make it back at that point. You do a short sale and/or a date of foreclosure so it doesn't totally ruin everything.

Remember, Florida is also a recourse state. Don't think those banks can't come back to you if they want to for the difference. If you're technically insolvent, don't worry about it. But if you're not insolvent, you better have a good plan of action here.

VELSHI: Suze, it is great to see you, thank you so much, thank you for everything you have done for everybody over the course of the last year.

And make sure you join Christine Romans and me every week for YOUR MONEY. Yes, Christine's coming back. Saturday's at 1:00 pm Eastern and Sunday at 3:00 right here on CNN. You can also log in 24/7 to CNNmoney.com. Have a great weekend.